Paraguayan President Santiago Peña on Wednesday expressed his willingness to pursue trade deals with China through the South American trade bloc Mercosur, despite Paraguay’s long-standing diplomatic ties with Taiwan. This move comes as Mercosur continues negotiations on a major trade deal with the European Union, and also explores possibilities with China.
Paraguay is the only South American nation that maintains formal diplomatic relations with Taiwan, a position that has historically complicated its agricultural trade, particularly grain exports, with China. The Asian giant, which claims sovereignty over Taiwan, has shown reluctance to trade with countries that officially recognize the island.
In an interview with Reuters, President Peña stressed Paraguay’s openness to advance trade agreements within the framework of Mercosur, which includes Brazil, Argentina, Uruguay and Paraguay. “Our position with China is one of total openness,” Peña said, noting that the main obstacle lies in China’s refusal to recognize Paraguay’s diplomatic support for Taiwan.
The Mercosur bloc has been actively involved in discussions with China, with a major dialogue session taking place on August 12 in Montevideo, capital of Uruguay. President Peña acknowledged the complexities involved, highlighting Brazil’s cautious stance but reaffirming his support for the negotiations. “I see caution on Brazil’s part,” he said, adding that Uruguay appears to be the most eager to advance talks with China. “We support this effort to have a conversation as a block.”
The potential trade deal with China could be a key development for Mercosur, which has long sought to expand its trade partnerships beyond the European Union. However, Paraguay’s unique diplomatic position with Taiwan remains a critical factor in how these discussions will play out.
Until now, there has been no immediate response from China’s foreign ministry or its embassy in Uruguay regarding Paraguay’s opening to these trade negotiations. The situation continues to develop as Mercosur navigates the complex dynamics of international trade and diplomacy.
